The trade ministers of the five BRICS nations (Brazil, Russia, India, China and South Africa) met this week in Shanghai, ahead of the annual summit of heads of state in Xiamen next month.
Trouble looms across the board. China and India are immersed in a silly, almost Monty Pythonesque face-off in the Tibet/Sikkim/Bhutan tri-junction, with People’s Daily blasting India for “wrong history”, “disordered logic”, and “blind moral confidence”.
India has de facto been snubbing China’s New Silk Roads, aka Belt and Road Initiative – the most ambitious infrastructure project of the 21st century – while Russia wants BRI firmly connected to the Eurasian Economic Union (EEU).
Russia is in a new round of economic war unleashed by the United States, fiercely denounced by Prime Minister Dmitry Medvedev.
Brazil, hostage to a House of Rats and “presided” over by a Dracula-esque crook rejected by 95% of the population, has been reverse-engineered since last year into the most blatant banana republic of modern history, tasty bananas included.
Adding to the gloom, the proverbial Cassandras insist BRICS will never become a united powerhouse; what matters for China is its complex global supply chain, while the other BRICS are in essence commodities exporters. Moreover, even when considering the group’s New Development Bank, launched in Shanghai two years ago as an alternative to the World Bank, BRICS isn’t credited with enough power to revamp the global economy.
All about BRI
Since 2001, BRICS in fact adopted a slow and steady path of progress, while eschewing a reductionist “winner takes all” mentality. The latest example is what happened this week in Shanghai, which Chinese Commerce Minister Zhong Shan hailed as a “great success”.
Trade ministers concentrated on creating the conditions for better cooperation in investment, service trade, e-commerce and intellectual-property-rights protection – aiming at progressively coordinating their trade policies.
China and Brazil, for instance, already key partners in infrastructure, energy and telecommunication, signed a memorandum of understanding to improve service trade in eight areas: engineering, architecture, e-commerce, banking automation, shipping, healthcare, finance, smart-city development and tourism. This MoU will be the framework for other BRICS nations to be engaged in service trade cooperation.
It also helps that Beijing is bound to open the Chinese market further to BRICS imports – and that President Xi Jinping himself is involved in a campaign against trade protectionism. In the past six months, China’s imports from BRICS went up 33% year on year. And China will host an international imports exhibition next year in Shanghai.
It was up to minister Zhong to come up with the clincher: “We hope that BRICS countries can further expand their cooperation with economies related to the Belt and Road Initiative. This will help to better meet the challenges brought by the uncertainties of the global economy and generate new growth momentum.”
Yes, it’s all about BRI
What the proverbial Cassandras don’t understand is that the BRICS group aims to work with a different template, as an “aggregating platform”, something that is being discussed at the highest levels, especially in the framework of the Russia-China strategic partnership.
Each BRICS member is indeed a leading economy in its continent or subregion, within a regional integration arrangement: Russia in the EEU; Brazil in Mercosur; South Africa in the South African Development Community (SADC); India in the South Asian Association for Regional Cooperation (SAARC); and China in the Shanghai Cooperation Organization (SCO) and the prospective Regional Comprehensive Economic Partnership (RCEP). Not to mention that Russia and India are also SCO members.
Thus the notion, enthusiastically backed by China, of a BRICS+ – an inevitable expansion uniting all countries that are BRICS partners in regional integration frameworks.
Then there’s what has been extensively discussed behind closed doors in BRICS summits since the previous decade: the increasing leverage, especially by China, at least to deal serious blows to the petrodollar.
Add to that the Russian commitment, after the latest declaration of war/sanctions package concocted by the House of Cards, sorry, Capitol Hill, increasingly to bypass the US dollar.
And that will be the day when Beijing will demand, globally, that energy sales be denominated not in US dollars but in yuan – as BRICS+ will have been, for a while, trading among themselves with their own currencies. That’s where we’re heading, slowly but surely, and that’s the – inexorable – game-changer that will silence the Cassandras for good.
You are a stubborn optimist Pepe. Your colorful Brazil comments, a little too close to home, are sadly accurate.
It is China’s ultimate goal to edge out the dollar as the world currency to reign supreme in world economy.
As I have always said, "Time is on the side of the fast developing countries, in particular China". There is no escaping it. Like it or not, the dollar’s dominance will be chipped away bit by bit. Maybe in 10 or 15 years, the RMB will be on a par with the dollar in terms of its circulation, which by that time, maybe, just maybe, barring some global financial catastrophy, the GDP of China would have surpassed the USs.
It would be better for BRICS to die a natural death to give rise to a bigger BRICS+++ Grouping like EAACSA encompassing nations from Eurasia, Africa, Central and South America.
BRICS has probably learned from President Duterte. Better to agree to disagree, and talk about border issues later. There are more important things to be done that need cooperation and friendship. We are in a sanction and currency war. It looks that the US is preparing for more regime changes and wars.
The US dollar has plummeted more than 10% so far, this year. There is an urgent need for an “Eastern” World reserve currency. China is using currency SWAP agreements with its main trading partners, a great idea, that reduces use of the Petro dollar. The US dollar will be affected negatively by sanctions, US political turmoil, falling US stock markets (correction is overdue), pending wars, and it is likely George Soros and other “Deep State” pillars will dump it to crush President Trump.
China’s idea with Gold Guaranteed bonds will sell like hotcakes. It will take DECADES before the Yuan become a significant World Reserve Currency, this is due to the turtle speed China have in making currency reforms. Anyway, China should invest the $ one trillion in the US, in China, and in developing markets. China’s US assets can be frozen at any time. Germany want their gold reserves return from the USA. USA refuses and deny the Germans to access their stored gold reserves!
That is not correct. "All men are brothers" is a chinese proverb. The facts are that the dollar and euro denominated systems are unstable with the irresponsible fiscal policies of USA, UK and EU. The current system causes a lot of damage to the world economy. The yuan and hopefully other currencies soon offer alternatives that will stabilise the world economy thereby fostering growth without war.
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Dont let US pull you all along its downfall.
I think that the US sanctions have had very little impact on Russia. Russia and the rest of the World, except the USA and the UK, are doing business using the Metric System. The inch, ft, yd, mile and lb (pound)) made in the USA cannot be sold in Russia or elsewhere due to consumers’ choice and ignorance of the U.S’s standard system. Maybe just foods and toys only.
That is a nice phrase. I reckon, these countries want to step out of the current system and that they are trying to emerge an alternative. I’m not quite sure if others will let them. That was quite a move (trying) to destabilise the B country not long ago.
A Cassandra is someone whose accurate prophecies are not believed by those around them. Usage?
It is not so much as to edge out the dollar in the international arena as to avoid being hostage to it.
that`s the goal of the New Sik Road
The US did this to itself. t is one thing to have its currency designated as the reserve trading monetary unit for thwhole World and qute another to use that financial arrangement to make economic war on other nations. A little of that activity goes a very long way to souring the rest of the World to such arrangement. That is what has happened and the World is now reacting negatively to constant financial provocation.